Caledonia acquires Liberation from LGV in £118m deal

Kenny Wastell
07 July 2016

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LGV Capital has sold UK pub operator The Liberation Group to Caledonia Investments in a deal valuing the business at ТЃ118m.

Caledonia will invest £70.6m in equity in exchange for a 98% stake in Liberation, while the business's management team will invest £1.4m.

Under its new owners, the company will look to expand through the acquisition of both individual pubs and pub groups in southern England.

The transaction is to be supported by a £51m debt package. No debt arranger has been confirmed, though Caledonia has agreed to underwrite the amount should no package be agreed by the time of completion.

Richard Grainger, formerly chair of Close Brothers Corporate Finance and storage business Safestore, will take on the role of chairperson at Liberation.

In March 2013, LGV announced it would no longer make new investments and instead focus on managing and divesting its portfolio. Since then, several of LGV's team have left the GP; most notably managing director Bill Priestley, who joined Electra Private Equity as a partner in January 2014. The firm recently sold its stake in UK caravan holiday homes manufacturer ABI to CBPE Capital.

Previous funding
LGV supported the management buyout of Liberation in July 2008.

Company
Founded in 2008, Liberation operates a chain of 94 pubs in the Channel Islands and south west of England. It also owns two breweries and three drinks distribution companies.

In the year to January 2016, the business generated EBITDA of £10.6m

People
Caledonia – Tim Lewis (investment director); Duncan Johnson (head of unquoted pool); Jayne Mould (investment manager).
Liberation – Mark Crowther (CEO).

Advisers
Equity – Houlihan Lokey, George Fleet (corporate finance); Macfarlanes, Stephen Drewitt (legal); Deloitte, Tim Haden (tax); Wyvern Partners, Mike Barnes (debt advisory).
Vendor – Sapient Corporate Finance, Fraser Anderson, Peter Hansen (corporate finance); CMS, Martin Treagus (legal); KPMG (financial due diligence).
Management – Cornerstone Corporate Finance, David Lilley, Ben Hewetson (corporate finance); Travers Smith, Adam Orr (legal).